ConCourt rules on CPS contract

Mar 17, 2017

The Constitutional Court has ensured that social security grants will be paid from 1 April, having extended the current contract with Cash Paymaster Services (CPS) for 12 months, while the South African Social Security Agency (Sassa) transitions to a new system.
The invalidity of the current CPS contract hasn’t been set aside, but continues to be in effect for the extended 12-month period.
The court ruled that both Sassa and CPS have a constitutional obligation to ensure grants are paid.
CPS will have the opportunity to negotiate with Treasury for an increase in payment for the extended contract. The company has also been ordered to show the court all of its financial information 30 days after the conclusion of the current contract.
The Consitutional Court action was brought by the Black Sash, which asked that the court exercise supervisory jurisdiction over any new contract, and that beneficiaries be protected from marketing or disbursements from their grants.
The current crisis stems from the declared invalidity of the CPS tender in 2014, at which time the contract was allowed to stand on the proviso that Sassa ensure there is another payment solution by the time it ends on 31 March 2017.
It has now emerged that Sassa is not able to take over payments, and no other service provider has come forward. However, this was only made known this month, leading to concerns that grants would not be paid on 1 April.
Given that the situation was allowed to develop in the first place – despite Sassa having assured the court in November 2015 that it would be able to assume grant payments itself by now, the court has expressed distrust in both the minister and the agency.
Minister of Social Development Bathabile Dlamini and Sassa have been ordered to file reports or affidavits to the Constitutional Court every three months on their plans and progress towards a new system.
In addition, it has ruled that the personal details of beneficiaries must be protected. This follows reports that companies related to CPS may have marketed their services to grant beneficiaries and even deducted payments from their grants.